IS FM A RISKY BUSINESS?
The theme for this year’s RICS FM strategic
Conference in June poses the question as
to whether facilities management is an
inherently risky business.
I’m looking forward to chairing the event and
the theme has prompted me to address some of
the aspects of our sector that should make us all
The recent failure of Carillion has put FM and
outsourcing more generally at the forefront of the
news agenda. The impact their collapse has had
upon the countless people that either work for or
supplied Carillion has been significant and highly
damaging for the whole image of the FM sector.
The harm inflicted upon those who received their
ultimate services has had significant political,
social and economic impacts for all involved.
But how did we get here? Carillion are not the
only supplier to have su ered financial troubles
in the recent term and across a broad spectrum of
outsourcing suppliers, profit warnings and sliding
share prices point to an underlying weakness in
the sector. Is this all down to risk transfer or are
there other factors at play within our market?
Risk is a two-way street. Commercial
organisations are rewarded for managing risk,
whilst customers and clients are obviously
motivated by defraying and o setting risk from
their own operations. This is the nature of the
market we operate in. The problems within
FM and more broadly across the whole built
environment comes when that risk transfer
becomes inequitable or (more worryingly) the
parties are unaware or unable to manage the risks
that they have taken on.
Risk transfer is fundamental to the
procurement process and when you then
overlay the heavily commoditised approach to
procurement that exists, add in a mix of poor
asset data and a lack of guidance, standards and
expertise then you are creating a very dangerous
The basics of the UK economy though are also
at play here. Shareholders demand year-on-year
growth, the market expects profits and dividend
increases and the pressure to win becomes all
encompassing. The pressure to continuously grow
both the bottom and top lines within the FM sector
eventually permeates throughout organisations
and the race to the bottom commences.
The craziness must stop though. A sustainable
approach is required from all of us that operate
within the sector to ensure that we work
collectively to develop some fundamental planks
that will support our industry going forward. A
standard form of contract which deals with risks
appropriately. Guidance on procurement that
outlines the quality and depth of information and
detail that is required for a successful contract.
Competencies that guarantee the quality and
ability of our teams. Standards that drive the
ethics and behaviours that calibrate the moral
compass under which we should all operate.
Facilities management is a risky business but
it is within our gi to mitigate those risks for the
betterment of us all.
A failure to properly manage risk and control
growth manifests itself in the collapse of Carillion
and the precarious financial health of several their
peers. The ethical imperative that we as leaders
within facilities management must confront,
however, is that the real pain of business failure is
not felt in the commons committees or financial
regulatory investigations alone. The directors of
organisations are o en caught in the headlines,
but the true damage is felt elsewhere.
The real pain and hurt of not managing risk
is felt in the homes of those employed by these
businesses or the SME’s who now no longer trade
because of unmanageably long payment terms,
on the back of pensioners who’s working lives
now count for a little less than expected in their
retirement years and on those apprentices who
now need to seek further opportunities at the very
start of their fledgling careers in FM.
Yes, FM is a risky business and we have a duty
to manage those risks in a professional, equitable
and ethical way to not place that burden on those
least able to deal with the consequences.
BLOG FROM RORY MURPHY, COMMERCIAL DIRECTOR, VINCI FACILITIES
Rory Murphy, Commercial Director, VINCI Facilities
NORTHERN CHARITY BALL RAISES
The Northern Charity Ball,
hosted by Incentive FM
Group was a resounding success,
beating last year’s amount by
raising over £16,000 for this
year’s chosen charities, Scotty’s
Little Soldiers and Cash for Kids.
Guests from the facilities
management sector and wider
business community took part in
the charity ball and casino night,
which was held at the Hilton Doubletree Hotel in She ield Park. The ball, now in
its fourth consecutive year included a blind and silent charity auction, a ra le, a
three-course dinner, and music from a live band.
Scotty’s Little Soldiers is dedicated to supporting bereaved children who
have lost a parent whilst serving in the British Armed Forces, and Cash for Kids
works to provide underprivileged and sick children in local communities with a
CHARTWELLS SUPPORTS CHILD HUNGER
DURING SCHOOL HOLIDAYS
Chartwells, Compass Group UK & Ireland’s specialist provider
of catering to the education sector, has partnered with social
mobility charity, Mayor’s Fund to support the Fund’s Kitchen Social
Kitchen Social is a response to a wider national campaign tackling
food insecurity in the school holidays, and the initiative gives young
Londoners, on free school meals and from low-income families, a safe
place to go where they can socialise and get a free healthy meal. The
project supports children’s general mental and physical well-being,
as well as teaching them life-skills. An additional package of training
modules has also been developed for those delivering holiday provision
to change long-term behaviour and build a sustainable infrastructure.
Chartwells kicked o the partnership during the February half-term
holiday. Its team of experts volunteered culinary expertise and services
in interactive cooking workshops at local Kitchen Social hubs: Lady
Allen Adventure Playground, Wandsworth; Leaders in the Community,
Tower Hamlets; Bridge Park Community Leisure Centre, Brent; Will
Perrin Court Hostel, Rainham; Bollo Youth Centre, Ealing and St Luke’s
APRIL 2018 53